In 1984, Saint Kitts and Nevis, the smallest sovereign state in the Americas, passed a law offering citizenship to individuals who “made a substantial investment in the state” and were of good character and not a threat to the country. In 1986, Canada launched its pioneering Immigrant Investor Program. Prior to this, several countries had offered immigration routes to businessmen looking to invest and grow their businesses.
The Canadian program, however, could be said to be the first true residence by investment program, as requirements were focused on investment of financial capital rather than human capital, i.e. business expertise and active entrepreneurship or investment management.
The United States launched its EB-5 visa for immigrant investors in 1990. The United Kingdom opened a migration route for investors in 1994 and, in more recent years, many European Union countries have introduced competing residence by investment programs.
In the late 1980s and throughout the 1990s, Canada was the dominant investor immigration program, driven by wealthy individuals seeking political stability.
Citizens of Hong Kong were motivated by risk associated with the upcoming transfer of sovereignty from the U.K. to China in 1997. From 1986 to 1996 the Canadian immigrant investor program welcomed more than 57,000 immigrants, of which nearly half were from Hong Kong.
Another 20,000 were from Taiwan, which at the time was undergoing democratic reform, with its political status resurfacing as a controversial issue and relations with mainland China thawing. Applicants from the Middle East also grew in the period, amid the Gulf War and unrest in the region.
The 1980s and 1990s also saw the emergence of citizenship by investment programs, led by St. Kitts and Nevis in 1984 and followed by Dominica in 1990 and Grenada in 1996. The demand for second citizenships also saw several nations introduce poorly planned and badly managed programs which ultimately failed.
Demand for investor immigration cooled in the late 1990s to mid-2000s. Successful applicants to the Canadian program fell; from 1997 to 2003, 34,000 people were granted residence in Canada through the program, down from 53,000 in the previous seven-year period. While Canada remained the most popular option for immigrant investors, programs in the U.S. and the U.K. were beginning to gain traction.
The last 10 years have seen another boom in investor immigration programs. Four Caribbean nations – St. Kitts and Nevis, Dominica, Grenada, and Antigua and Barbuda now offer citizenship by investment programs. Cyprus and Malta have also recently introduced programs, which require higher investment but offer the attraction of European Union citizenship.
Residence by investment programs are also booming in popularity and increasing in numbers. The U.S. EB-5 issued its full quota of more than 10,000 visas in fiscal year 2014, and now faces a large backlog, led by a surge in applicants from China. While the federal Canadian program was closed in 2014, investors can still immigrate to Canada via Quebec’s program and various provincially run nominee programs. Programs in the U.K., Australia and New Zealand have continued to grow, while a number of countries in the European Union have introduced programs, with Bulgaria, Hungary, Latvia and Portugal enjoying notable uptake.
The rise in popularity of such programs has created a growing advisory industry to help prospective and current immigrant investors. Key services provided by the industry include: personalized advice on availability and suitability of various programs; legal advisory on tax, immigration, citizenship, real estate and private law; investment advisory and management; representation and consulting with governments; administrative solutions; and due diligence.